SEC FY 2026 Examination Priorities: Key updates and regulatory focus areas

For investment advisers, the SEC continues to prioritize adherence to fiduciary duties of care and loyalty, particularly for firms serving retail investors. Examinations will assess whether advice and disclosures align with client objectives, risk tolerance and financial circumstances, and whether conflicts of interest are identified, mitigated and disclosed. 

The Division highlights ongoing scrutiny of complex, illiquid or higher-cost products, including private credit, private funds with extended lockups, leveraged and option-based Exchange-Traded Funds (ETFs), and strategies sensitive to market volatility. Recommendations made to older investors and retirement savers remain a key focus. Advisers with structural complexities – such as dual registration, third-party account access or recent mergers – may face increased examination attention. 

The SEC reiterates that compliance programs must be tailored, implemented or enforced. Examinations will focus on marketing, valuation, trading, custody, disclosures and annual compliance reviews, with particular attention to fee-related conflicts and compensation structures.  

Registered investment companies, including mutual funds and ETFs, remain a priority due to their significance to retail and retirement investors. Examinations will focus on fees and expenses, portfolio management practices, disclosure accuracy and governance. The amended Fund Names Rule continues to be a focus as funds approach extended compliance deadlines. Funds employing complex, illiquid, leveraged or novel strategies may receive heightened scrutiny. 

Broker-dealer examinations will emphasize compliance with financial responsibility rules, including net capital, customer protection, liquidity risk and reliance on third-party service providers. Trading practices remain a core area, including best execution, order routing, extended hours trading and valuation of illiquid securities. 

Regulation Best Interest remains central to retail sales practice reviews. The SEC will focus on recommendations involving complex or tax-advantaged products, alternative investments, private placements, structured products, annuities, municipal securities and certain ETFs, particularly when recommended to seniors or retirement-focused investors. 

Cybersecurity remains a perennial priority as firms face increasing risks from ransomware, advanced malware, third-party dependencies and geopolitical or climate-related disruptions. Examinations will assess governance, access controls, incident response and recovery planning, vendor risk management and employee training. Operational resiliency and the ability to maintain critical services during disruptions continue to receive heightened attention. 

The FY 2026 priorities reflect expanded scrutiny of emerging technologies, particularly AI and automated tools used in advisory, trading, compliance, anti-money laundering (AML) and operational functions. The SEC will assess the accuracy of AI-related disclosures and whether firms have appropriate governance, controls and supervisory frameworks to ensure outcomes remain consistent with regulatory obligations and investor protection standards. 

 The SEC continues to emphasize effective AML programs, including customer identification, beneficial ownership requirements, SAR filings and independent testing, as well as monitoring compliance with OFAC sanctions. Firms are also expected to prepare for and comply with amended Regulation S-P and Regulation S-ID requirements, including incident response programs, identity theft prevention, safeguarding customer information and oversight of third-party vendors.